Units of Canada’s largest pure-play office real estate investment trust (REIT) fell more than 25 per cent on Wednesday after Allied Properties Real Estate Investment Trust (AP-UN.TO) announced a $500-million equity offering and the departure of its founder.
Allied owns a large portfolio of urban office buildings in Canada, with more than half located in Toronto. Calgary and Montreal are the company’s next-largest markets.
In a news release on Tuesday, Allied announced plans to sell $350 million worth of units to investors in a marketed offering. The Toronto-based company also plans to raise an additional $150 million by selling units in a private placement. Allied says the proceeds will be allocated to debt repayment.
Allied units fell as much as 25.9 per cent on the Toronto Stock Exchange on Wednesday, setting a new 52-week low. Units have fallen over 70 per cent over the past five years, as Allied faced significant disruptions in the office real estate market following the COVID-19 pandemic.
10.16 -3.89 (-27.69%)
As of 10:39:11 GMT-5. Market open.
“While the return to historical occupancy levels has taken longer than expected, we’re seeing an increase in demand and limited new supply on the horizon,” Allied president and CEO Cecilia Williams stated in a news release.
“Against this backdrop we’re executing an action plan to strengthen our balance sheet and improve financial flexibility.”
Allied also announced its founder, Micheal Emory, will depart his executive chairman role after May 2.
More to follow.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.